Citigroup: Conducting a 30-day positive catalyst observation on GEELY AUTO (00175)

Citigroup released a research report stating that they will conduct a 30-day positive catalyst observation on GEELY AUTO (00175), with a "buy" rating and a target price of HK$26. The bank expects the company to deliver 690,000 vehicles in the first quarter of this year, with an average selling price increasing by 8% quarterly. Including non-vehicle revenue, the expected revenue is about 91 billion RMB. The bank also expects Geely's first-quarter comprehensive gross profit margin to increase by 0.3 percentage points to 17.2%. Assuming a sales and management expense ratio of 12.4% of quarterly revenue, the bank predicts that core net profit in the first quarter will be between 3.8 billion and 4.2 billion RMB, exceeding market expectations. Furthermore, Geely expects a profit margin improvement in the second quarter, with an expected sales volume of high-margin models like the 8X reaching 10,000 to 20,000 units in the second quarter. The bank also predicts that export volumes in the second quarter will increase by 10% quarterly.